Yes, you can apply for the Employee Retention Credit even if you received PPP funds. Employers that received PPP funds are eligible for the Employee Retention Credit. Although both PPP or Payroll Protection Program and ERC or Employee Retention Credit are programs that come under the CARES Act, they are not anyways the same and are not an either/or option for businesses.
ERC and PPP are two entirely different programs. Click here to learn more about ERC or Employee Retention Credit and your scope of applying for ERC after receiving PPP benefits or vice-versa. An ERC specialist can help you understand more about ERC and PPP and their eligibility criteria.
Are PPP and ERC Benefits the Same?
No, Payroll Protection Program and Employee Retention Credit are different programs that come under the CARES Act. PPP or Payroll Protection Program is a loan to help businesses cover their payroll and related expenses. Therefore, PPP is a loan program that helps businesses to retain their employees on the payroll. Whereas, ERC is a tax credit for employers who have retained their employees on payroll during COVID times.
However, both are very helpful and beneficial to businesses in need of relief from their payroll tax obligations.
Is it possible to apply for the ERC Credit in addition to PPP?
Yes, you can apply for ERC in addition to PPP. However, remember that these are two different programs and should not be confused with each other. When applying for ERC credit, employers can only claim ERC credit along with its corresponding payroll taxes paid.
How Do ERC and PPP Help Businesses?
Businesses have been greatly affected by COVID and the related government-imposed COVID restrictions. While some businesses had to completely shut down their operations, some other businesses had to partially shut down their businesses.
In fact, businesses were affected by COVID in many different ways. Supply chain disruption, safety and sanitization guidelines, and scarcity of raw materials were some of the few impacts of COVID on businesses in the US.
Some of the neediest businesses were also impacted by COVID directly. Those neediest businesses were mostly small and medium-sized businesses that needed to shut down their operations temporarily. However, with PPP and ERC benefits, those businesses were able to continue operating despite the COVID restrictions imposed. These two government programs, in fact, helped these businesses to retain their employees on payroll during the COVID impacts.
The overall effect of PPP and ERC on the US economy is immense. It helped many businesses to not shut down their businesses, maintain their operations, and even have more job opportunities.